The apprenticeship levy is part of the government’s plan to create 3 million new apprenticeships in England by 2020 and to encourage employers to invest in apprentices. The levy is paid and collected through HMRC mainly by larger employers who can claim back their levy contribution to pay for training apprentices. The amount of levy funding employers have to spend is available on the Government’s online Apprenticeship Service and the employers’ Digital Service Account.
Let CCCT guide you through the levy
CCCT can help you understand the apprenticeship levy and maximise funding incentives available. We offer a one-stop service to navigate the new funding arrangements and make sure that your workforce benefits from the high-quality training supported by the levy.
What training does the levy support?
UK employers with an annual wage bill of over £3 million are required to invest in apprenticeships. The levy funds can be used for approved apprenticeship programmes that meet employer-approved apprenticeship standards. The training is for existing staff or new recruits who meet the eligibility requirements.
How much do employers contribute to the levy?
The levy rate is 0.5% of the total wages bill for employers (in all sectors and industries) who have a total employee pay bill of more than £3 million a year.
Use the Apprenticeship Levy calculator to estimate your contributions.
Will employers receive other funding support?
The government is encouraging employers to support young people in quality apprenticeships by providing additional funding incentives:
- To offset the levy contribution, the government provides an allowance of £15,000 to levy-paying organisations.
- If you employ a 16 to 18 year-old apprentice, you will receive £1,000 to help meet training costs.
- The £1,000 payment also applies if you employ a 19 to 24 year-old apprentice who was formerly in care or has an Education and Health Care plan.
- If you employ someone 19 years or older, the government will contribute 90% of the training cost.
- Those employers who contribute to the levy benefit from a 10% top-up to their Digital Service Account.
- If employers use up all of their levy funding pot, they only need co-invest 10% for additional apprenticeships training, the government will fund the balance of training cost.
- Employers with a wage bill of less than £3 million do not contribute to the levy but are required to co-invest 10% of training costs with the government funding the balance.
How do I use my levy contribution to pay for apprenticeship training?
If you contribute to the levy, you will be able to see the funds you have available for apprenticeships online. To do this you will need to register for, or use your current Government Gateway account. Log in to your account and add the details for the PAYE scheme you will use for your apprenticeship. You will then be able to manage your apprenticeship by adding apprentices’ names and quickly and easily authorise training provider payments.
Where can I find out more?
To find out more about how much you will be able to spend on each apprenticeship:
- Read about the funding bands for apprenticeship standards
- Read more about Apprenticeship funding in England
- Read further guidance from GOV.UK: Apprenticeship funding: how it will work
Read our paper on Demystifying the Levy
Let CCCT guide you through the apprenticeship levy.
Employers can call: 0207 391 6400 or email: firstname.lastname@example.org